California has some of the most stringent piece-rate compensation laws in the nation. If you employ workers on a piece-rate basis, understanding Labor Code §226.2 is essential to avoiding costly violations.
What is Piece-Rate Compensation?
Piece-rate compensation pays workers based on the number of units they produce or tasks they complete, rather than the hours they work. This is common in industries like:
- Auto repair - technicians paid per job or "flat rate"
- Agriculture - workers paid per bin harvested
- Manufacturing - workers paid per unit produced
- Construction - workers paid per task completed
The Six Elements of Compliant Compensation
Under California law, piece-rate employees must receive compensation for several distinct elements:
- Base hourly rate wages - For non-productive time
- Training pay - Paid at a separate rate if applicable
- Rest and recovery pay - Calculated at the weighted average hourly rate
- Production bonuses - With proper overtime adjustments
- Semi-monthly bonuses - With overtime premiums
- Monthly bonuses - Applied correctly in the pay period
Why Compliance Matters
Violations of §226.2 can result in:
- $50-100 penalty per employee, per pay period
- PAGA lawsuits which are at all-time highs
- Back pay requirements for improperly calculated wages
Getting Help
Calculating compliant piece-rate compensation manually is time-consuming and error-prone. That's why we built CompliCalc—to automate the complex math California law demands.
Join our waitlist to be among the first to try CompliCalc when it launches.